CEPSA ANNOUNCES FIRST-QUARTER 2012 EARNINGS 1 - SUMMARYClean CCS net income in 1Q2012 totaled €101.3 million, slightly lower by -1% from the year before.
Clean CCS EBIT in the 3-month period amounted to €214.0 million, climbing 5% from the figure posted in the same quarter of 2011.
Clean CCS EBITDA stood at €382.7 million, up 5% from 1Q2011.
  • In the Exploration & Production segment, EBIT rose 21% from a year ago, primarily attributable to the 13% increase in crude oil prices.
  • Refining margins continued to be notably weak throughout most of the first quarter, evidencing a sharp fall in February and a rebound at the end of March which has carried on into April. Marketing margins were likewise hampered by market conditions although CEPSA's sales grew 1.5% in the period. In this environment, downstream EBIT slid 21% from the figure posted in the first quarter of 2011.
  • In the Petrochemicals segment, a less auspicious outlook for growth eroded margins compared to favorable performance in 2011, leading to a 19% drop in EBIT year-on-year. However the figure for 1Q2012 was higher by 66.7% from the preceding quarter
  • The increase in the electricity pool price (+12%), higher sales and MEDGAZ activity drove Gas & Power EBIT up 29% from the year before.
2 - KEY EARNINGS FIGURES
RESULTSMillions of euros
1Q12
4Q11
1Q11
% s/ 4Q11
% s/ 1Q11
EBITDA
528,3
442,6
502,6
19,4%
5,1%
Clean CCS EBITDA
382,7
373,6
363,5
2,4%
5,3%
EBIT
361,1
193,3
342,7
86,8%
5,4%
Clean CCS EBIT
214,0
167,5
203,6
27,8%
5,1%
Net Income
204,7
79,8
199,7
156,5%
2,5%
Clean CCS Net Income
101,3
64,8
102,4
56,3%
-1,1%

CEPSA posted an IFRS net income, using the average cost method of accounting, of €204.7 million in the first quarter of 2012, up +2.5% from the €199.7 million recorded in the same period of 2011 and +156.5% from 4Q2011.
Factoring out the effect of inventory price variations and other non-recurring item s, which stood at €103.4 million in 2012 and at €97.3 million in 2011, Clean CCS net income for the three-month period totaled €101.3 million, slightly down by -1% from the figure of €102.4 million posted in 1 Q2011 but +56.3% from 4Q2011.
3 - INFORMATION BY BUSINESS SEGMENTS Exploration & ProductionCEPSA's crude oil production from its working interests in 1Q2012 totaled 115.2 kb /d, dropping -6.1% from a year ago, as a result of lower output from Algeria chiefly on account of scheduled maintenance shutdowns. The Company's net entitlement in the period, understood to be the amount assi gned to it after applying contractual conditions and before paying taxes, amounted to 47.4 kb/d, lightly lower by 1% from 2011, since the negative impact of higher crude oil prices and their effect on production-sharing contracts in Algeria was partly offset by greater output in Colombia.
Crude oil sales amounted to 2.8 million barrels, more than the 2.3 million barrels sold in 2011, while sales revenues in dollars were up 36.7%.
Throughout the quarter, CEPSA carried on developing its exploration activities with preparatory work for the performance of seismic and drilling campaigns in the Rhourde er Rouni II exploration block in Algeria and with long-term testing to confirm the commercial feasibility of three blocks in Colombia.
Clean CCS EBIT from upstream operations stood at €137.1 million, rising €23.4 million (+21%) from the figure posted in the same period of 2011, driven by the upward trend in crude oil prices.
Refining & MarketingRefinery output in 1Q2012 stood at 5.9 million tons, rising 7.3% in the year-on-year comparison. Product sales amounted to 6.8 million tons, up 1.5% from the same period of 2011.
Despite these increases in output and sales, lower refining margins weighed on Clean CCS EBIT in the period, which totaled €25.3 million, falling €6.6 million (-20.7%) from the figure posted in the same quarter of 2011.
PetrochemicalsPetrochemical sales activity in the first quarter of 2012 was in line with the same period of 2011 and 4.4% lower than in the previous quarter.
Worse performance in PTA/PIA/PET activities and to a lesser extent in Phenol/Acetone placed Clean CCS EBIT at €40 million in 1Q2012, down 18.7% from the figure of €49.2 million poste d in the same quarter of 2011. The figure for this first quarter of the year was however higher by 66.7% from the preceding quarter.
Gas & PowerElectric power sales in the period stood at 1,039 GWh, climbing 11.9% from the previous year. The electricity pool price was likewise higher (+12%) than in the same period of 2011. As for natural gas marketing, sales totaled 8,405 GWh in 1Q2012, with activity jumping 37% vis-à-vis the same period o f 2011.
This increase in activity and price led to a Clean CCS EBIT of €11.5 million in th e quarter, evidencing an improvement of 29% from a year ago.

GLOSSARY OF TERMS
# Crude oil entitlement: CEPSA's entitlement to the production from a field, after applying contractual conditions and before paying taxes.
# Production from working interests: CEPSA's share of production from its working interest in the field, before applying contractual conditions and paying taxes.
# EBITDA (Earnings before interest, taxes, depreciation & amortization) = Gross income - operating expenses + income from logistical affiliates carried by equity method.
# EBIT (Operating Income) = EBITDA, depreciation and amortization, capital grants, impairment of current assets, impairment of tangible assets and operating provisions.
# PTA/PIA/PET - PTA (Purified Terephthalic Acid) PIA (Purified Isophthalic Acid), PET (Polyethylene Terephtalate). Raw materials for manufacturing PET packaging, powdered paint and unsaturated polyester resins
# NET INCOME (IFRS) = The CEPSA Group´s consolidated financial statements are prepared using International Fina ncial Reporting Standards (IFRS). Net Income is Income attributable to shareholders of the parent company, equivalent to Operating income - net financiall income, non-operating provisions, other income and expenses, corporate income tax and minority interests.
# CLEAN CCS NET INCOME = Results according IFRS applies the weighted average cost method of accounting to iinventory valuation. However, as a more meaningful indicator of profitability and bottom-line performance in its major segments, CEPSA, as is the case with other companies in oil industry, adjusts its earnings to eliminate the effect on the Company's assets from price fluctuations in crude and refined products i nventories that are required both for legal (minimum security stocks) and operational reasons. (Clean CCS - Clean Current Costs of Supplies).
# Kb/d - Thousands of barrels per day

Disclaimer

COMPAÑÍA ESPAÑOLA DE PETRÓLEOS, S.A.U. (CEPSA), with registered offices at Avenida del Partenón, 12, 28042 -Madrid (Spain) and corporate tax ID number A28003119, and its Group of Companies, have disclosed the results of their businesses through this document merely for information purposes and to comply with legislation in force.

As the earnings figures contained herein have not been audited, CEPSA makes no warranty, representation or guarantee of any kind that this information is complete, accurate and/or entirely up-to-date. Any use of the information included in this document for purposes other than those for which it is intended is strictly forbidden. CEPSA shall not be held responsible or liable for any consequential loss or damage incurred by persons using the contents of this document for purposes other than those expressly set forth above.

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Madrid, May 17th, 2012

CEPSA - Communications & Institutional Relations Division

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